Following the bustling Watches and Wonders convention, the Swiss watch industry encountered a sobering reality with the release of its March export figures. According to data from the Federation of the Swiss Watch Industry, exports for the month experienced a significant downturn, dropping by 16.1 percent year-on-year, hovering just above the 2 billion Swiss franc threshold.
This downturn contributed to a first quarter contraction of 6.3 percent compared to the same period in 2023, although it remained higher than figures from the first quarter of 2022.
Wristwatch exports in March saw a substantial decline by volume, plummeting by 25.4 percent. This translated to nearly 400,000 fewer watches leaving the country compared to March 2023, impacting all price segments.
Mainland China and Hong Kong, traditionally significant markets for Swiss timepieces, experienced sharp declines of 41.5 percent and 44.2 percent, respectively, contributing significantly to the overall contraction for the month. Notably, exports to mainland China dipped even lower than levels observed in March 2020, during the onset of the COVID-19 pandemic.
Despite the overall downturn, there were pockets of growth, with India emerging as a bright spot with a 9.2 percent increase in exports in March.
The high-end segment, comprising watches priced above 3,000 Swiss francs, experienced a relatively lesser impact, contracting by 9.9 percent, compared to a more significant decline for watches priced below 500 Swiss francs.
Analysts remain cautiously optimistic, particularly for the upper-end watch segment, noting its resilience amidst economic challenges. However, concerns linger over the mid-market segment, which saw a substantial decrease in both export value and unit numbers, reflecting subdued spending by aspirational consumers.
Looking ahead to 2024, macroeconomic headwinds present significant challenges, with factors such as inflation, interest rates, and changing consumer behaviors impacting overall growth prospects.
Material-wise, steel, which represents over half of all watch exports, witnessed a notable decline in both volume and value, weighing heavily on the industry’s performance in March. While other material categories experienced declines, bimetallic and “other materials” pieces fared relatively better.
Despite the prevailing challenges, industry stakeholders remain hopeful for a gradual recovery, buoyed by emerging market opportunities and resilience in the high-end segment.
